Jose Koshy's  Instablog

Last week the Indian markets moved up by 2.2 % on the back good results coming out and the FII investment into the market. The strengthening of the Indian rupee is a major cause for the fresh investments. The global liquidity is driving money to emerging markets; the benefit of a growth economy with a stable currency is driving markets. The US last week had some good data around employment with Unemployment falling to 8.3 %, the lowest since 2008. The Nasdaq has hit a 11 year high last week. The anticipation of the Facebook IPO and the risk money moving to risky bets are rising. The bundling of poor rate securities is also back to fashion in the developed world. These are times to be careful with investments. The global rally is driven by high liquidity driven by central bankers who are pushing in low interest rate regime to prop their economies. The money is flowing to speculative assets vs actually driving growth in the local economies. Last week the Supreme Court in India has cancelled the 122 Telecom license on grounds of faulty license policy. This has made many investors nervous on investments in India but also upheld the fact that India is not a crony capitalistic economy where politicians can have a free hand. This was taken well by the markets in the belief this will be good to attract investment into India in a more transparent way.

This week the Indian markets have the result season continuation with big names like HUL, Hindalco, Tata Power & M&M announcing. The IIP data will be keenly watched for any sign of slowdown. The markets are closer to the resistance levels of 5400, so trade carefully. Any small global or local weakness will be sold into. The Indian markets are up 15 % in 5 weeks. So a round of profit booking may be round the corner. The Greece settlement is still not closed and there is the weekend fear of Iran - Israel/US conflict over the nuclear issues.

The derivatives position for the week stands at Rs 120132 Crs in OI; the PCR is at 1.40 the option IVs for Calls at 21 % & Puts at 25 %. The Nifty Future is trading at 14 point Premium to spot. The Technical & Derivative positions seem to suggest a sideways move.

Nifty on 27th Jan 2012: 5325

Nifty trading ideas for the week: Resistance around 5400 - 5420

Stock ideas for the Week: Sell Infosys on an Up move to 2820 - Target: 2650 SL : 2840

Trade safe

Last week the Indian markets moved up by 3 % on the back of the RBI policy which reduced CRR by 50 basis points. We also had the derivative settlement with short positions being squared off, leading to a move up. The FII's have invested $ 2 Billion in January, this is on the back of weakening $. The India Rupee has strengthened by 10 % in the last month. The result season had low expectations, so any small surprise is being lapped up. The Indian market is up 14 % from December lows. The global headlines still talk about the EU coming out of the crisis, as of now the cheap loan to the banks is doing the trick. The balance sheet sizes are expanding in EU & the US with the free money model. The US Fed has come out with a statement last week on keeping interest rates low till 2014 and also pegged inflation at 2 %. With so much of free money all over the globe, not sure how the Fed plans to manage this.

This week the Indian markets have the result season continuation & January Auto & Cement sales reports coming in. The Greece debt settlement is closely watched to see what the hair cut & coupon rates will be. The EU ministers meet on Monday to take stock of their economy and actions. We already have talks of Portugal going the Greece way. The Economic entertainment keeps the global investors & traders on the edge. The global markets are looking a bit exhausted and we can expect sideways moves with a negative bias going forward.

The derivatives position for the week stands at Rs 98465 Crs in OI; the PCR is at 1.23 the option IVs for Calls at 19 % & Puts at 21 %. The Nifty Future is trading at a 8 point Premium to spot. The Technical & Derivative positions seem to suggest a sideways move.

Nifty on 27th Jan 2012: 5204

Nifty trading ideas for the week: Sideways moves - Sell < 5120 for a Target of 5000

Stock ideas for the Week: Sell DLF around Rs 213 for a Target of Rs 200 SL : Rs 220

Trade safe

Last week the Indian markets moved up by 3.8 % on the back of nonstop FII buying and global cues. The Indian market has moved up by a whopping 7.7 % in January till date marking the highest increase in a decade. Is this a technical up move from an oversold condition? I would think so! The European markets are staring at a recession and free money is being pushed into the markets. This high liquidity driven moves can hurt fiscal discipline and can have very bad long term effect across the globe. The US dollar has been strengthening and last week came down by 2 %. The Euro bond auction has been well accepted and the Spanish & Italy bong yields have been falling. The Indian result season has kicked off to expectations. The volumes in the markets have been tepid. The Indian market is running up on expectation of rate cuts from the RBI.

This week the Indian markets has many events to digest, the RBI policy on 24th, the derivative settlement on 25th, the US Fed meeting on 25th and the results season. The week can be volatile and a move up is expected. The Rally may be in the last legs, so be careful with the moves.

The derivatives position for the week stands at Rs 139232 Crs in OI; the PCR is at 1.60 the option IVs for Calls at 19 % & Puts at 21 %. The Nifty Future is trading at a 8 point Premium to spot. The Technical & Derivative positions seem to suggest a move up till settlement.

Nifty on 21st Jan 2012: 5048

Nifty trading ideas for the week: Volatility expected - Avoid Trading

Stock ideas for the Week: Volatility expected

Trade safe